Stock Splits and Stock Dividends ________

question 16

Multiple Choice

Stock splits and stock dividends ________.

• A)are just paper financial transactions
• B)divide the firm's existing shares into multiple shares with the same total dollar value
• C)may be used to signal management's intentions to the marketplace
• D)All of the above

---

Definitions:

Compounding

The process whereby interest is credited to an existing principal amount as well as to interest already paid, causing the investment to grow at an accelerating rate.

Time Value

A financial principle stating that an identical amount of money has more value if it's accessible now rather than later, thanks to its capability to earn more over time.

Money

A medium of exchange that enables people and businesses to buy goods and services; recognized by a society to have value for transactions.

Annuity Due

A series of equal payments made at the beginning of consecutive periods over a fixed length of time.